Bad deal: U.S. shouldn’t forgive loans
At a time when the United States faces record budget deficits, a costly war in Iraq and many unmet needs of its own, one must question the wisdom of President Bush agreeing to join seven other industrialized nations in forgiving $40 billion in debt racked up by poorer countries. On the surface it all sounds good and noble: The so-called G-8, including the U.S., are going to write off the $40 billion, which equals 100 percent of the debt owed by 18 countries, many in sub-Saharan Africa. According to the Associated Press report, this money is owed to the World Bank, the International Monetary Fund and the African Development Bank.
The giveaway gets better: Another 20 countries will qualify for similar debt forgiveness if they agreed to tackle corruption and meet good governance standards. If that happens the debt relief package could reach $55 billion. We can see the medal-wearing dictators and military juntas replacing themselves right now.
Think this fiscal misfeasance can’t get any better? It does. Britain and its Prime Minister Tony Blair want to increase international development aid to poor nations by $50 billion a year. It’s ironic that the effort is being led by Britain, the nation whose main idea for African aid a century ago was to colonize the continent and siphon off its resources.
Bush had insisted that the debt write-off be subtracted from future aid packages, a pretty solid position, but he relented. So the United States will end up paying $1.3 billion to $1.75 billion each year for the next 10 years, for starters. That amounts to between $13 billion and $17.5 billion, a pretty hefty sum that would address a lot of domestic needs if you’re a liberal or could be tossed into the tax-cut kitty if you’re a conservative. It would finish the Mon-Fayette Expressway, for certain, with lots left over.
Whatever happened to the premise that if you borrow money, you should repay it? And why should the G-8 pump even more cash into nations with admittedly corrupt leaders, many of whom live like kings while oppressing their people beyond belief? Isn’t removing such leadership why the U.S. imposed sanctions on Iraq and then, with Britain’s support, invaded that country to oust Saddam Hussein?
Our federal government constantly tells us there isn’t enough money. Not enough for Social Security solvency. Not enough for health care. Not enough for education. Not enough for infrastructure. Not enough for veterans. The word “crisis” is bandied about when each of those is mentioned.
Canceling the loans to other countries will reportedly save them $1.5 to $2 billion each year, money that Britain’s treasury chief said would go for “health, hospitals, nurses, education, schools, teachers and infrastructure.”
What Bush failed to realize is that we need more of those things, too. In an era where the global economy is hammering U.S. workers and companies, and we’re being told to brace for increasing competition from abroad, the President should be reminded of another time-tested moral axiom: Charity begins at home.